Pulling the Brake

Last year we, er, railed against the boondoggle known as the California high-speed rail (HSR) project, aka the train to nowhere. Yesterday Sacramento judge Michael Kenny halted the $10 billion expenditure of bond funds until a realistic plan for raising the remaining $15 billion is presented.

the state's current financing plan does not comply with the promises made to voters in 2008 when they approved selling $10 billion in bonds for the project. Beyond the $6 billion in state and federal funds for the first 130 miles, the judge said, revenue is theoretical rather than "reasonably expected actually to be available starting in 2015." The current cost estimate for building the first 300 miles, which the judge has indicated he believes is what the bond measure intended to finance, is $31 billion.

Supporters of HSR were undoubtedly counting on the project's momentum and arm-twisting by special-interest beneficiaries to force continuation of the project regardless of the wording in the 2008 initiative. HSR may still proceed if the legislature votes the funds, or if a realistic financing plan is devised.  Nevertheless, Judge Kenny's insistence that the Governor and other supporters live up to the promises they made to get the law passed is refreshing....and rare.

Renaissance in Rail

At the office: a post from 2003

Railroads have been operating in the United States for 200 years, and their demise has been predicted since the advent of the Interstate Highway System. Decaying infrastructure, very unreliable schedules, inflexible union work rules, costly maintenance---the list of problems seemed endless a few decades ago.

Now,

Welcome to the revival of the Railroad Age. North America's major freight railroads are in the midst of a building boom unlike anything since the industry's Gilded Age heyday in the 19th century—this year pouring $14 billion into rail yards, refueling stations, additional track. With enhanced speed and efficiency, rail is fast becoming a dominant player in the nation's commercial transport system and a vital cog in its economic recovery.

To industry veterans "speed" and "efficiency" are not adjectives often associated with railroads. But economics (cost versus other modes of transportation) and technological innovation (not only in equipment, but probably more so in communications and information processing and analytics) have led to a renaissance in rail.

It doesn't happen all the time, but second chances do occur in business. The hopeful lesson: if one can manage to just hang on long enough (e.g., Apple, Mattel, Wells Fargo, Ford), it is possible to recapture a place in the sun. © 2013 Stephen Yuen